How to invest with ZERO SWR in retirement next 25+ years ?

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Topic Author
carminered2019
Posts: 1939
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How to invest with ZERO SWR in retirement next 25+ years ?

Post by carminered2019 »

Age: 52( 2nd year in retirement)
SWR: ZERO
DEBT: ZERO
Expenses: covered by RE. rentals
Risk tolerance: High(no problem with 50% correction)

Current Holding
Cash: 8X
Bonds(TB& some Munis): 14X
Equities IN/US(25%/75%): 54x


Since my SWR is ZERO, should I just keep 10X yearly expenses and go 100% equities for the next 25+ years ?
KlangFool
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Re: How to invest with ZERO SWR in retirement next 25+ years ?

Post by KlangFool »

carminered2019 wrote: Sat Jan 22, 2022 7:55 pm Age: 52( 2nd year in retirement)
SWR: ZERO
DEBT: ZERO
Expenses: covered by RE. rentals
Risk tolerance: High(no problem with 50% correction)

Current Holding
Cash: 8X
Bonds(TB& some Munis): 14X
Equities IN/US(25%/75%): 54x


Since my SWR is ZERO, should I just keep 10X yearly expenses and go 100% equities for the next 25+ years ?
If we hit a recession and you cannot rent out your properties, how long can you last with that 10X?

I was in Asia during the Asian Currency Crisis. Many RE tycoons were wiped out.

KlangFool
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gogreen
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Re: How to invest with ZERO SWR in retirement next 25+ years ?

Post by gogreen »

carminered2019 wrote: Sat Jan 22, 2022 7:55 pm Age: 52( 2nd year in retirement)
SWR: ZERO
DEBT: ZERO
Expenses: covered by RE. rentals
Not sure what’s your q. You can absolutely whatever you want with the excesses of money - 90/10 Buffet style, [suggestion to invest in crypto removed by moderator oldcomputerguy], invest in racing horses, winery, donate all, burn cash in the fireplace :sharebeer
000
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Re: How to invest with ZERO SWR in retirement next 25+ years ?

Post by 000 »

At your level of wealth one could start pondering deep risks like fiat currency wipeout, asset confiscation, taxflation, and government debt default.
aristotelian
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Re: How to invest with ZERO SWR in retirement next 25+ years ?

Post by aristotelian »

What do you mean SWR is zero, do you have zero spending? Based on your portfolio your spending is about 1.3%.
Last edited by aristotelian on Sat Jan 22, 2022 8:18 pm, edited 1 time in total.
randomguy
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Re: How to invest with ZERO SWR in retirement next 25+ years ?

Post by randomguy »

KlangFool wrote: Sat Jan 22, 2022 7:58 pm
carminered2019 wrote: Sat Jan 22, 2022 7:55 pm Age: 52( 2nd year in retirement)
SWR: ZERO
DEBT: ZERO
Expenses: covered by RE. rentals
Risk tolerance: High(no problem with 50% correction)

Current Holding
Cash: 8X
Bonds(TB& some Munis): 14X
Equities IN/US(25%/75%): 54x


Since my SWR is ZERO, should I just keep 10X yearly expenses and go 100% equities for the next 25+ years ?
If we hit a recession and you cannot rent out your properties, how long can you last with that 10X?

I was in Asia during the Asian Currency Crisis. Many RE tycoons were wiped out.

KlangFool
Well with 10x in cash and 66x in stocks, I would feel pretty comfortable saying he can last forever. The only risk would be that you start spending all that money to prop up the real state empire or being way off in expenses.

10x in bonds/cash and sinking it all in the market is reasonable. 30 years in cash and 30 years in stock would also be somewhat reasonable.
Normchad
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Re: How to invest with ZERO SWR in retirement next 25+ years ?

Post by Normchad »

If your rentals truly cover aLl your expenses, it doesn’t matter what you do with your portfolio. You can set all your money on fire, and be just fine.

I’m guessing though, this isn’t the case…..

Are you panicking? Do you need to be panicking? Just tune out the noise and go back to whatever you thought was a good idea just a month ago.

FWIW, your current portfolio does not represent one for a person with “very high risk tolerance”. Are you sure you understand yourself?
Last edited by Normchad on Sat Jan 22, 2022 8:23 pm, edited 2 times in total.
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AAA
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Re: How to invest with ZERO SWR in retirement next 25+ years ?

Post by AAA »

What is SWR?
KlangFool
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Re: How to invest with ZERO SWR in retirement next 25+ years ?

Post by KlangFool »

randomguy wrote: Sat Jan 22, 2022 8:18 pm
KlangFool wrote: Sat Jan 22, 2022 7:58 pm
carminered2019 wrote: Sat Jan 22, 2022 7:55 pm Age: 52( 2nd year in retirement)
SWR: ZERO
DEBT: ZERO
Expenses: covered by RE. rentals
Risk tolerance: High(no problem with 50% correction)

Current Holding
Cash: 8X
Bonds(TB& some Munis): 14X
Equities IN/US(25%/75%): 54x


Since my SWR is ZERO, should I just keep 10X yearly expenses and go 100% equities for the next 25+ years ?
If we hit a recession and you cannot rent out your properties, how long can you last with that 10X?

I was in Asia during the Asian Currency Crisis. Many RE tycoons were wiped out.

KlangFool
Well with 10x in cash and 66x in stocks, I would feel pretty comfortable saying he can last forever. The only risk would be that you start spending all that money to prop up the real state empire or being way off in expenses.

10x in bonds/cash and sinking it all in the market is reasonable. 30 years in cash and 30 years in stock would also be somewhat reasonable.
randomguy ,

Those X has to do with annual expense. It does not account for the mortgage payment of the rental properties.

<<Well with 10x in cash and 66x in stocks, I would feel pretty comfortable saying he can last forever. >>

I would not be so confident.

KlangFool
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Zeno
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Re: How to invest with ZERO SWR in retirement next 25+ years ?

Post by Zeno »

carminered2019 wrote: Sat Jan 22, 2022 7:55 pm Age: 52( 2nd year in retirement)
SWR: ZERO
DEBT: ZERO
Expenses: covered by RE. rentals
Risk tolerance: High(no problem with 50% correction)

Current Holding
Cash: 8X
Bonds(TB& some Munis): 14X
Equities IN/US(25%/75%): 54x


Since my SWR is ZERO, should I just keep 10X yearly expenses and go 100% equities for the next 25+ years ?
Looks like you have 76x

Otherwise I had a hard time interpreting the all-caps screaming.

If you are at 76x, you are in great shape.
Topic Author
carminered2019
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Re: How to invest with ZERO SWR in retirement next 25+ years ?

Post by carminered2019 »

Not bragging, yearly expenses is not as high as many people. I just want to know how much I should keep in cash and not worry about my portfolio and not worry about rebalancing.
Normchad
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Re: How to invest with ZERO SWR in retirement next 25+ years ?

Post by Normchad »

carminered2019 wrote: Sat Jan 22, 2022 8:34 pm Not bragging, yearly expenses is not as high as many people. I just want to know how much I should keep in cash and not worry about my portfolio and not worry about rebalancing.
You don’t need any cash at all. Then again you don’t need any equities either.

It does not matter what you do, given the facts presented.

So do whatever it is that makes you comfortable.

Keeping 10X in cash or whatever is not a terrible idea at all. If you makes feel comfortable, go for it.
KlangFool
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Re: How to invest with ZERO SWR in retirement next 25+ years ?

Post by KlangFool »

carminered2019 wrote: Sat Jan 22, 2022 8:34 pm Not bragging, yearly expenses is not as high as many people. I just want to know how much I should keep in cash and not worry about my portfolio and not worry about rebalancing.
How much is your mortgage payment? 10X? 20X?

KlangFool
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Topic Author
carminered2019
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Re: How to invest with ZERO SWR in retirement next 25+ years ?

Post by carminered2019 »

KlangFool wrote: Sat Jan 22, 2022 8:39 pm
carminered2019 wrote: Sat Jan 22, 2022 8:34 pm Not bragging, yearly expenses is not as high as many people. I just want to know how much I should keep in cash and not worry about my portfolio and not worry about rebalancing.
How much is your mortgage payment? 10X? 20X?

KlangFool
I had zero mortage 1.5 years ago and my first real return on the rentals was last year after 24 years of RE. investment.
Zeno
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Re: How to invest with ZERO SWR in retirement next 25+ years ?

Post by Zeno »

Unless you anticipate living beyond age 128, you are in good shape.
KlangFool
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Re: How to invest with ZERO SWR in retirement next 25+ years ?

Post by KlangFool »

carminered2019 wrote: Sat Jan 22, 2022 8:42 pm
KlangFool wrote: Sat Jan 22, 2022 8:39 pm
carminered2019 wrote: Sat Jan 22, 2022 8:34 pm Not bragging, yearly expenses is not as high as many people. I just want to know how much I should keep in cash and not worry about my portfolio and not worry about rebalancing.
How much is your mortgage payment? 10X? 20X?

KlangFool
I had zero mortage 1.5 years ago and my first real return on the rentals was last year after 24 years of RE. investment.
Then, how much is your property tax and maintenance for the rental properties?

You are running a business. You need cash reserve for your business.

KlangFool
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dbr
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Re: How to invest with ZERO SWR in retirement next 25+ years ?

Post by dbr »

There is a confusion in terminology here. A person who does not withdraw from a portfolio Withdrawal Rate (WR) of zero.

SWR is not a property of the management of one's retirement. It is a formal theoretical property of a portfolio, namely that under some form of formal model of returns, inflation, and so on one can estimate that it is "safe" to withdraw a certain fraction of the initial portfolio value with little or no chance of running out of money in a specific extent of time. That formal rate of withdrawal is called the Safe Withdrawal Rate (SWR). Because a model is a model and has uncertainties it can happen that the SWR does in fact fail. In fact it is not logically impossible for an actual withdrawal rate of zero to still result in a portfolio that runs out of money. An example would be a portfolio that had been invested entirely in the stock of General Motors and all the money lost in the bankruptcy.
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Re: How to invest with ZERO SWR in retirement next 25+ years ?

Post by BernardShakey »

carminered2019 wrote: Sat Jan 22, 2022 7:55 pm Age: 52( 2nd year in retirement)
SWR: ZERO
DEBT: ZERO
Expenses: covered by RE. rentals
Risk tolerance: High(no problem with 50% correction)

Current Holding
Cash: 8X
Bonds(TB& some Munis): 14X
Equities IN/US(25%/75%): 54x


Since my SWR is ZERO, should I just keep 10X yearly expenses and go 100% equities for the next 25+ years ?
Buy more real estate...
An important key to investing is having a well-calibrated sense of your future regret.
Zeno
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Re: How to invest with ZERO SWR in retirement next 25+ years ?

Post by Zeno »

dbr wrote: Sat Jan 22, 2022 9:12 pm There is a confusion in terminology here. A person who does not withdraw from a portfolio Withdrawal Rate (WR) of zero.

SWR is not a property of the management of one's retirement. It is a formal theoretical property of a portfolio, namely that under some form of formal model of returns, inflation, and so on one can estimate that it is "safe" to withdraw a certain fraction of the initial portfolio value with little or no chance of running out of money in a specific extent of time. That formal rate of withdrawal is called the Safe Withdrawal Rate (SWR). Because a model is a model and has uncertainties it can happen that the SWR does in fact fail. In fact it is not logically impossible for an actual withdrawal rate of zero to still result in a portfolio that runs out of money. An example would be a portfolio that had been invested entirely in the stock of General Motors and all the money lost in the bankruptcy.
+1

As a Feynman fan, I get that a 0% SWR doesn’t just asymptotically approach zero. It just never does that.

I aspire to a 0% SWR.
randomguy
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Re: How to invest with ZERO SWR in retirement next 25+ years ?

Post by randomguy »

KlangFool wrote: Sat Jan 22, 2022 8:23 pm
randomguy wrote: Sat Jan 22, 2022 8:18 pm
KlangFool wrote: Sat Jan 22, 2022 7:58 pm
carminered2019 wrote: Sat Jan 22, 2022 7:55 pm Age: 52( 2nd year in retirement)
SWR: ZERO
DEBT: ZERO
Expenses: covered by RE. rentals
Risk tolerance: High(no problem with 50% correction)

Current Holding
Cash: 8X
Bonds(TB& some Munis): 14X
Equities IN/US(25%/75%): 54x


Since my SWR is ZERO, should I just keep 10X yearly expenses and go 100% equities for the next 25+ years ?
If we hit a recession and you cannot rent out your properties, how long can you last with that 10X?

I was in Asia during the Asian Currency Crisis. Many RE tycoons were wiped out.

KlangFool
Well with 10x in cash and 66x in stocks, I would feel pretty comfortable saying he can last forever. The only risk would be that you start spending all that money to prop up the real state empire or being way off in expenses.

10x in bonds/cash and sinking it all in the market is reasonable. 30 years in cash and 30 years in stock would also be somewhat reasonable.
randomguy ,

Those X has to do with annual expense. It does not account for the mortgage payment of the rental properties.

<<Well with 10x in cash and 66x in stocks, I would feel pretty comfortable saying he can last forever. >>

I would not be so confident.

KlangFool
What mortgage? Dude has zero debt. It was in caps:) Now he might have property taxes and the like but he doesn't have to use personal assets to prop up the bussiness if it starts failing. Sell the property and walk away. When something like a 1.5% SWR starts to fail, odds oof it matter if you had 10 or 20 years in cash isn't going to matter cause the odds of cash being worthless are just to high.....
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carminered2019
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Re: How to invest with ZERO SWR in retirement next 25+ years ?

Post by carminered2019 »

Normchad wrote: Sat Jan 22, 2022 8:21 pm If your rentals truly cover aLl your expenses, it doesn’t matter what you do with your portfolio. You can set all your money on fire, and be just fine.

I’m guessing though, this isn’t the case…..

Are you panicking? Do you need to be panicking? Just tune out the noise and go back to whatever you thought was a good idea just a month ago.

FWIW, your current portfolio does not represent one for a person with “very high risk tolerance”. Are you sure you understand yourself?
No, not panic at all. I was 100% in equities from 1995 until I retired 2019 but I also had a W-2 income back then. When I retired in 2019, I did not know what to expect in the first two years of retirement, so I went with 20x in bonds/cash but now my RE. covers 100% of my personal expenses including property taxes and I want to keep growing the portfolio for future generations. My cash will be my EF but not sure how many years to keep and I don't care much for bonds.
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Re: How to invest with ZERO SWR in retirement next 25+ years ?

Post by AlphaLess »

carminered2019 wrote: Sat Jan 22, 2022 7:55 pm Age: 52( 2nd year in retirement)
SWR: ZERO
DEBT: ZERO
Expenses: covered by RE. rentals
Risk tolerance: High(no problem with 50% correction)

Current Holding
Cash: 8X
Bonds(TB& some Munis): 14X
Equities IN/US(25%/75%): 54x


Since my SWR is ZERO, should I just keep 10X yearly expenses and go 100% equities for the next 25+ years ?
Instead of saying that your expenses are zero, you should come up with an asset value of your R/E holdings, add those to the rest of your assets, and compute your W/D rate.

For example, if your real estate assets are worth 30X, then you have total of:
8 + 14 + 54 + 30 = 106X

So, your W/D rate is 1/106 = 0.943%.
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Topic Author
carminered2019
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Re: How to invest with ZERO SWR in retirement next 25+ years ?

Post by carminered2019 »

AlphaLess wrote: Sat Jan 22, 2022 11:34 pm
carminered2019 wrote: Sat Jan 22, 2022 7:55 pm Age: 52( 2nd year in retirement)
SWR: ZERO
DEBT: ZERO
Expenses: covered by RE. rentals
Risk tolerance: High(no problem with 50% correction)

Current Holding
Cash: 8X
Bonds(TB& some Munis): 14X
Equities IN/US(25%/75%): 54x


Since my SWR is ZERO, should I just keep 10X yearly expenses and go 100% equities for the next 25+ years ?
Instead of saying that your expenses are zero, you should come up with an asset value of your R/E holdings, add those to the rest of your assets, and compute your W/D rate.

For example, if your real estate assets are worth 30X, then you have total of:
8 + 14 + 54 + 30 = 106X

So, your W/D rate is 1/106 = 0.943%.
So you treat RE. as part of the overall portfolio and does that include your primary home ?
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HomerJ
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Re: How to invest with ZERO SWR in retirement next 25+ years ?

Post by HomerJ »

carminered2019 wrote: Sat Jan 22, 2022 7:55 pm Age: 52( 2nd year in retirement)
SWR: ZERO
DEBT: ZERO
Expenses: covered by RE. rentals
Risk tolerance: High(no problem with 50% correction)

Current Holding
Cash: 8X
Bonds(TB& some Munis): 14X
Equities IN/US(25%/75%): 54x


Since my SWR is ZERO, should I just keep 10X yearly expenses and go 100% equities for the next 25+ years ?
LOL. Do whatever you want. You have 76 years of expenses in your portfolio, which you don't even need to touch because your rental income covers all your expenses (Doesn't look like you included your rental equity in there either).

If I was you, I'd start giving money away and helping people. You asked, that's my answer. Otherwise do whatever you want. You're smart enough to do this math. You have no money problems whatsoever.
"The best tools available to us are shovels, not scalpels. Don't get carried away." - vanBogle59
dbr
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Re: How to invest with ZERO SWR in retirement next 25+ years ?

Post by dbr »

carminered2019 wrote: Sat Jan 22, 2022 11:49 pm
AlphaLess wrote: Sat Jan 22, 2022 11:34 pm
carminered2019 wrote: Sat Jan 22, 2022 7:55 pm Age: 52( 2nd year in retirement)
SWR: ZERO
DEBT: ZERO
Expenses: covered by RE. rentals
Risk tolerance: High(no problem with 50% correction)

Current Holding
Cash: 8X
Bonds(TB& some Munis): 14X
Equities IN/US(25%/75%): 54x


Since my SWR is ZERO, should I just keep 10X yearly expenses and go 100% equities for the next 25+ years ?
Instead of saying that your expenses are zero, you should come up with an asset value of your R/E holdings, add those to the rest of your assets, and compute your W/D rate.

For example, if your real estate assets are worth 30X, then you have total of:
8 + 14 + 54 + 30 = 106X

So, your W/D rate is 1/106 = 0.943%.
So you treat RE. as part of the overall portfolio and does that include your primary home ?
One can do that. I prefer to suggest it be done by scenario. In other words, what would be the situation if I sell the real estate. What would be the situation if I sell my home and move to a smaller home or rent, including funding a facility for elder care. Then the asset base and also the expenses change to new situation which is an alternative to what existed before. But it is a plausible alternative that can actually come to pass.

Figuring out how to apply portfolio theory to a portfolio that includes risk and return of real estate assets is complicated to understand and implement. Not acknowledging that asset value of RE including one's home exists is just incomplete thinking.
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Re: How to invest with ZERO SWR in retirement next 25+ years ?

Post by Jack FFR1846 »

SWR is not zero. That would imply that you cannot remove any investment money to spend safely.

What do you spend? That's need.

Then, what is all the income? That includes rental income, social security, pensions, salary, part time job.

So then need minus income is withdrawal requirement. If withdrawal requirement is zero of minus, then you don't need to spend any savings. A sustainable withdrawal rate is 100%. You can withdraw it all right now and buy yourself a Pagani (if you have that much) or if not, a more pedestrian Lamborghini or Ferrari or Porsche is you have very little.

If you don't withdraw 100%, how you invest is really up to you. You could use one of the rule of thumb suggestions like age in bonds and 30% of stocks international. Or the permanent portfolio with 25% everything including gold. Or whatever you want to do. There isn't a set method to invest money that you don't need. Some would say you've won the game. Stop playing and go 100% bonds. Others would say you have no risk and could lose all that money so go 100% bitcoin. I don't think there's a right answer or even a recommended answer.
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quietseas
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Re: How to invest with ZERO SWR in retirement next 25+ years ?

Post by quietseas »

You are in very good shape and can do whatever you want based off your risk tolerance. What are your goals? How do you want to spend your time?

As examples, do you want to continue to build a business operating rental real estate properties? Do you want to become more involved with family possibly to include helping to raise grand children? Do you want to become more involved in charity to include volunteering time as well as contributing money? It really is your personal preference including if you believe you have an obligation to family or society to continue to accrue assets and wealth (some people do feel this way it seems)? These are all personal decisions you can make.
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Re: How to invest with ZERO SWR in retirement next 25+ years ?

Post by afan »

I am still not sure I understand the OP's situation.

To clarify:

After ALL expenses of the real estate- taxes, insurance, maintenance, repairs, an annual allocation to a fund to cover costs of irregular expensive repairs, like a new roof, and individual income taxes on the rental income, the RE income covers ALL living expenses. Is that correct?

If so, how much larger is the surplus annual expense than the need? If it just barely covers expenses, then there is a high likelihood of spending some money beyond the after tax RE income, at least in some years. If expenses go up as one ages- have to hire people to do things once done oneself, move into a retirement home, whatever, then the need to spend beyond rental income becomes expected.

If the RE income is much more than spending needs- say double, then all the other sources of income, SS, pension, etc simply add to the cushion.

How secure is the RE income? Risk of losing tenants, unable to raise rents to keep up with inflation, exposure to local downturns in the RE market? If the portfolio is widely diversified geographically and holds a wide variety of properties- residential, commercial, some long term leases from highly stable businesses, etc then it is secure. Of course, things can go wrong and if they do we come back to the question of excess of net RE income over need.

But lets say the RE income is extremely secure AND that the lifetime net is double the anticipated lifetime needs, including allowance for large increases in living expenses.

If all of that is true, then how to invest becomes a matter of goals. For supporting oneself through life, it does not matter because one will never use any of the portfolio for spending. Then it is invested for heirs, individuals or charities. One could go all stock in the hopes of maximizing the amounts they receive.

This exposes the heirs to the risk of the value being lower, perhaps much lower, at inheritance than it is now. If one wants to avoid that, then reduce the risk of the portfolio.

How much to reduce risk depends about the relative importance of maximizing the inheritance vs leaving some minimum figure.
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Nate79
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Re: How to invest with ZERO SWR in retirement next 25+ years ?

Post by Nate79 »

Why are you investing? Do you not have any goals for the money? Why not spend and enjoy life?
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Wiggums
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Re: How to invest with ZERO SWR in retirement next 25+ years ?

Post by Wiggums »

We keep three years in cash. The rest is invested at AA 65/35. We use the cash for Roth conversions, travel, and to have a little cushion if the market tanks. This will give us options with respect to when we sell stocks. Since your expenses are covered by your RE holdings, shouldn’t you hold cash for major repairs, vacancies, etc. I would recommend that you hold some cash. There is no magic number, but have cash for contingencies.
"I started with nothing and I still have most of it left."
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Re: How to invest with ZERO SWR in retirement next 25+ years ?

Post by AlphaLess »

carminered2019 wrote: Sat Jan 22, 2022 11:49 pm
AlphaLess wrote: Sat Jan 22, 2022 11:34 pm
carminered2019 wrote: Sat Jan 22, 2022 7:55 pm Age: 52( 2nd year in retirement)
SWR: ZERO
DEBT: ZERO
Expenses: covered by RE. rentals
Risk tolerance: High(no problem with 50% correction)

Current Holding
Cash: 8X
Bonds(TB& some Munis): 14X
Equities IN/US(25%/75%): 54x


Since my SWR is ZERO, should I just keep 10X yearly expenses and go 100% equities for the next 25+ years ?
Instead of saying that your expenses are zero, you should come up with an asset value of your R/E holdings, add those to the rest of your assets, and compute your W/D rate.

For example, if your real estate assets are worth 30X, then you have total of:
8 + 14 + 54 + 30 = 106X

So, your W/D rate is 1/106 = 0.943%.
So you treat RE. as part of the overall portfolio and does that include your primary home ?
Primary home: NO.

But any other investment properties: yes.

Why?

1. You paid money for them,
2. They are an asset with risk and reward,
3. They may or may not be yield producing (stocks have dividend, bonds have coupon and interest, and R/E has net cashflow),
4. You can always sell them.

So, yea, I would say R/E is part of your portfolio.

Primary home: No.
I don't carry a signature because people are easily offended.
dbr
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Re: How to invest with ZERO SWR in retirement next 25+ years ?

Post by dbr »

AlphaLess wrote: Sun Jan 23, 2022 2:52 pm
carminered2019 wrote: Sat Jan 22, 2022 11:49 pm
AlphaLess wrote: Sat Jan 22, 2022 11:34 pm
carminered2019 wrote: Sat Jan 22, 2022 7:55 pm Age: 52( 2nd year in retirement)
SWR: ZERO
DEBT: ZERO
Expenses: covered by RE. rentals
Risk tolerance: High(no problem with 50% correction)

Current Holding
Cash: 8X
Bonds(TB& some Munis): 14X
Equities IN/US(25%/75%): 54x


Since my SWR is ZERO, should I just keep 10X yearly expenses and go 100% equities for the next 25+ years ?
Instead of saying that your expenses are zero, you should come up with an asset value of your R/E holdings, add those to the rest of your assets, and compute your W/D rate.

For example, if your real estate assets are worth 30X, then you have total of:
8 + 14 + 54 + 30 = 106X

So, your W/D rate is 1/106 = 0.943%.
So you treat RE. as part of the overall portfolio and does that include your primary home ?
Primary home: NO.

But any other investment properties: yes.

Why?

1. You paid money for them,
2. They are an asset with risk and reward,
3. They may or may not be yield producing (stocks have dividend, bonds have coupon and interest, and R/E has net cashflow),
4. You can always sell them.

So, yea, I would say R/E is part of your portfolio.

Primary home: No.
A primary home has all those properties as well. A difference is that it may be much less practical to sell the home. On the other hand, selling the home can be a key part of the plan for retirement income if one chooses or is forced to downsize or move to a rental. It will certainly be part of the assets in one's estate.
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